Page 7 - JanuaryFebruary25 CBA Report

Probate Avoidance
Everybody knows someone with a
“nightmare” probate story. In fact, I often
have clients who come to me after their
parents’ deaths when one of two things
happened: (1) their parents planned well
and everything was so easy that they now
want to give that “gift” to their children
or (2) their parents did not plan well, the
whole experience was a nightmare, the
children all ended up fighting, and they do
not want to do that to their own children.
Probate is also public. In many counties, it
is very easy to access all of the documents
filed in an estate. Many people do not like
the potential for friends and neighbors to
learn “their business.” This is particularly
true when a client has an unusual disposi-
tive plan (like disinheriting a child).
While Ohio offers many probate
avoidance techniques, like transfer on
death designations for real estate, cars
and boats, and securities and payable on
death designations for bank accounts,
they are often not the best option. For
example, naming multiple beneficiaries
on a transfer on death designation for real
estate can complicate the sale of the prop-
erty after the owner’s death – especially
if the beneficiaries are married and every
spouse has to also sign the deed. Naming
beneficiaries directly with these tools
also does not allow for changed circum-
stances (like the death of a child before the
parents), and if the clients are not diligent
in updating the beneficiary designations
when circumstances change, there is a risk
that the property will not be distributed as
the clients intended.
Incorporating a revocable trust into a
client’s estate plan provides flexibility and
reduces complications. For example, if
the trust owns the real estate (or is named
TOD beneficiary), the trustee can sell the
real estate and distribute the proceeds to
the beneficiaries. The trust should also
have provisions for what happens if a bene-
ficiary predeceases the client. The trust can
be amended to react to changed circum-
stances without requiring updating all of
the beneficiary designations. If probate
avoidance is important to the clients, you
should impress upon them the impor-
tance of properly funding the trust during
their lives or through beneficiary designa-
tions naming the trust. I frequently work
with clients and their financial advisors to
ensure that this funding occurs.
These common scenarios are just the tip
of the iceberg for when including a revo-
cable trust may greatly benefit a client.
To serve our clients best, it is important
to dispel the myth that trusts are only for
the super wealthy. Creating a trust is often
less expensive than people think it will be,
and, while it may cost a little bit more on
the front end, a trust can avoid costs and
complications on the back end, which, in
my experience is something clients want
to achieve.
Christina Clowers Flanagan is a partner at Wood
+ Lamping LLP, is an Ohio State Bar Association
Certified Specialist in Estate Planning, Trust and
Probate Law and currently serves as Vice Chair of the
CBA Estate Planning & Probate Practice Group. She is
a 2011 graduate of University of Cincinnati College of
Law licensed in Ohio and Kentucky.
1 Indexed for inflation each year.
2 Rather than a complicated, two trust, A/B structure.
3 Which can be extended until age 25. R.C. 5814.09.
4 Any trust can include trust protector provisions. See
R.C. 5808.08 and the Official Comments thereto. This
is one example of a situation where trust protector
provisions could benefit your clients.
THE REPORT | January/February 2025 | CincyBar.org 7